Huawei Technologies Corporation: from local dominance to global challenge?

Abstract

Purpose-The paper aims to identify the challenges faced by Huawei Technologies, China's biggest telecommunications equipment manufacturer, as it makes the transition from an indigenously-owned business to a potentially competitive global giant. Design/methodology/approach-This is an inductive, interpretative case study complimented by hands-on experience with the industry. Findings-The paper finds that Huawei lies at a crossroads in a transitional telecommunication sector that is no longer isolated from global reforms and advancement. Through internationalisation the company has learned to compete by adjusting their mechanisms, learning instruments and focus. Originality/value-The paper is useful for practitioners in that it shows how indigenous companies in latecomer industrialising countries like China can overcome the late mover position in some of the advanced markets they have entered. For academics it highlights the role of government in helping to construct competitive indigenous firms that could take on global giants.

Does a Connection Exist Among National Culture, Alliance Strategy, and Leading Ict Firms’ Performance?

“…Huawei's global expansion is undoubtedly connected with building numerous alliances (Low 2007). Weak alliances with companies present on foreign markets primarily allowed the firm to sell products and services on these markets (with partners from, inter alia, Germany, Russia, Sweden, the US, Israel, the UK, Canada, Australia, India, Venezuela, France, and several African countries).…”

Intellectual Management: An Integrative Theory

“…Huawei was established in 1988 in Shenzhen City as a private enterprise during the peak of China's economic reforms and technological advancement (Low, 2007). It is now the largest telecom vendor in China and the world's largest supplier of Softswitch (Foster and Reinsch, 2010).…”

“…Even because of the low cost of Chinese talents, Huawei has had the luxury of being able to get much more research done, for the same amount of investment of its western rivals (Foster and Reinsch, 2010). In a sector where future growth and expansion is heavily dependent on R&D, this makes Huawei globally competitive (Low, 2007). It has 16 R&D institutes in countries including China, Germany, India, Russia, Sweden, and the USA and has established 34 joint innovation centers with leading operators (Huawei, 2014).…”

Chinese regional innovation systems in times of crisis: The case of Guangdong

“…Generally speaking, one fourth to one third of all R&D activities in the Chinese hightech industry are performed in the province of Guangdong. A significant share of this expenditure is accounted for by two large private firms: Huawei (Low 2007) and ZTE. Nonetheless, the data suggest that an increase in investment from "other" sources may indicate increasing R&D investment by small and medium-sized enterprises that do not fit into the official LME classification.…”

“…This strong sectoral specialization in a single field is a distinct feature of the Guangdong innovation system and can to a great extent be attributed to the R&D activities of a single large firm, Huawei in Shenzhen (Low 2007). This telecommunication firm is singular in being a Chinese private enterprise with a substantial amount of turnover that continuously invests more than 10% of its revenue in R&D. In 2006, with 8.8 billion RMB, more than a third of all industrial R&D expenditures in the province could be attributed to Huawei (2008: 16 billion RMB).…”